Our research shows that the vast majority Limited Company owners use accountants to help them manage their business's finances.
If you're running a Limited Company, using or thinking of using Coconut, and wondering if you need an accountant, here are a few things to bear in mind.
How Coconut helps
Our mission is to eliminate business admin by combining banking and accounting into one simple product.
We offer the functionality of a business bank account, combined with accounting features like:
- Store your receipts and invoices
- Add notes and annotations to your transactions
- Automatic categorisation of your income and expenditure
- Create and send professional invoices
Whilst Coconut has a ton of functionality, there are things that you might want to enlist the help of an accountant for.
When you might need an accountant
As a Limited Company owner, there are some things that you will typically need to speak to an accountant for.
You might be planning to draw a salary from your business. If you're a sole director/owner, it's quite common to pay a small salary of around £6-700 and then pay dividends on top of that.
To run payroll, you first have to register your business with HMRC as an employer. You'll get a reference number that you then use when processing your payroll.
An accountant will usually sort all this for you, both the registration and the processing of payroll, then they'll tell you how much to pay yourself each month.
We're planning to add support for this, but don't have it just yet. In the meantime you could enlist the help of an accountant and share your records with them to help process this for you.
Filing accounts at the end of the year
You can export all the data in your account into a rich CSV which can be shared with an accountant and used to create your end of year financial accounts, which also get used to complete your company tax return.
Preparing annual accounts is a specialist activity that accountants spend all day doing, and so we recommend using an accountant for this to make sure you get everything right.
Whenever you make a payment from a limited company to yourself you have to make sure you do it in the right way. There are 3 types, and each gets recorded and reported differently:
- Payroll - When you pay yourself through payroll, you have to file this with HMRC. This has to use payroll software. Either you can do this yourself, or find an accountant to do this for you.
- Dividends - these are paid out of the profit your business makes. You'll record them in your financial statements and report them to HMRC at the end of the year in your personal tax return.
- Director's Loan - Any payments made outside of these 2 things gets recorded as loans, either to or from the business. Accountants often call this your "Director's loan account".
An accountant will give you advice on how to manage your pay most effectively to optimise your tax bill.
Using Coconut with your accountant
We're working on an accountant portal that will allow you to share read-only access with your accountant, so they can help you manage your business finances.
In the meantime, you can export your data from the app at any time into a detailed CSV format to share with them.
Our accounting partner
If you don't have an accountant yet, but you're looking for one, we work with an accounting partner called CheapAccounting.co.uk. They are a national network of independent accountants.
If you think you might like some advice, you can request someone to get in touch by filling out this form.